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Dedicated to support entrepreneurs and nonprofits with tips, strategies and insight to build strong foundations.

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  • EDITOR Dr. Victoria Boyd President, the GALAXY group, llc

    PUBLISHER Theresa Goss Creative Director, TGo & Associates

    Contributing WritersMarilyn DonnellenDr. Tamme ShinshuriRalph Stalter

    ADS FOR A CAUSEGalaxy Publishing offers a unique advertising model with 10% of the profit collected from purchased ads is donated to charity. Have your marketing dollars have community impact with meaningful marketing.

    For advertising inquiries contact:GALAXY PUBLISHING702-483-8354 or email [email protected] Magi Ranch Ct. Las Vegas, NV 89131

    A Division of the Galaxy Group, LLC

    Table of Contents

    4 Letter from the Editor

    8 Meet the Team Dr. Tamme Shinshuri

    Marilyn Donnellen

    Ralph Stalter

    17 The Next Path and Generation of Doing Business

    11 An Overview to Business Philanthropy

    13 Philantrepreneur Approach to Starting a Nonprofit

    15 The Dynamic Development of Las Vegas Cultural Corridor

  • Copyright 2013 The Philantrepreneur a division of the GALAXY group, llcAll rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write the publisher, addressed Attention: Permissions Coordinator, at the address below.Galaxy Group Publishing 5500 Magi Ranch Court Las Vegas, Nevada 89131

    Legal disclaimer and terms of use. Although the Galaxy group, llc believes the content to be accurate, complete and current, the GALAXY group, llc makes no warranties as to the accuracy, completeness or currency of the content. It is your responsibility to verify any information before relying on it. None of the information contained herein should be construed as legal advice, nor is anyone associated with the GALAXY group, llc engaged in legal practice of law. If you need legal advice, please seek the advice of independent legal counsel. Publisher accepts no responsibility to return unsolicited editorial matter and all rights in portion published thereof remain the sole property of the GALAXY group, llc. Letters to the GALAXY group, llc or its editors become the property of the journal and are assumed intended for publication and republication in whole or in part, and may be used for this purpose. These letters may be edited for length, errors and clarity. The statements, opinions, and points of view expressed by contributing writers and advertisers are their own and do not necessarily represent the views of the publisher or editor.

    The Philantrepreneur Radio Show Aired the 1st & 3rd Wednesday each month www.BlogTalkRadio.com/philantrepreneur Join us LIVE with comments or questions 347-945-7404

    Register for Free However Membership has its Benefits Explore the resources & perks

    SO MANY WAYS TO CONNECT WITH US!!

    Questions? Email: [email protected] www.ThePhilantrepreneur.com

    Easy and Convenient Connect on the Go

  • y perspective through most of my career was clearly influ-

    enced and driven by the nonprofit sector viewpoint. It was

    passion driven and all about the cause. However, with any

    cycle, life span or evolution, whatever your take on it, we all know time brings

    about change. The shift was made clear when I recently listened to Michael

    Drew talk about the concept of his book, Pendulum, whom he co-authored

    with marketing guru Roy Williams. The concept is based on the theory that we

    oscillate between a civic-minded We society and an individual Me society.

    Currently, we are swinging from a Me society to a We. As noted by Drew, in

    2003 the pendulum began the shift and is now headed toward a society that

    will celebrate working together. Michaels presentation and theory was based

    on marketing trends and was an eye-opener for me. It helped explain some

    of the concepts oscillating within me. I had been delving more and more into

    the for-profit, corporate world to learn more about their needs. In 2009 I was

    fortunate to attend a conference in Chicago that really solidified the con-

    cept. There must be a shared vision, the We is what I am seeking working

    together, building strong foundations. In addition, it was supported by the

    numerous articles and research reports in the industry. The nonprofit sector

    was struggling because of economic shifts and also because they were still

    living in the mindset of Me their cause. Funding sources became harder

    and harder to secure as corporations already were making the shift to We.

    Even in the desert a seedling can

    emerge. Ive taught and supported

    nonprofits for many years and

    watched as they struggled. I asked

    myself, how can I help? At the

    same time I was asking, whats

    next? In February 2013, I wrote

    my first blog and coined the term

    Philantrepreneur, a compilation of

    philanthropist and entrepreneur. You

    might say, why didnt you use philanthropreneur that was already in the

    market place? I believe this concept has a shift and places more emphasis

    on the entrepreneurial component. As it emerged, the core resources are

    focused on building strong business and management strategies.

    Therefore, I am so excited to release the premier edition of The Philantre-

    preneur Journal!! Dedicated to the growth, support and development of this

    movement that will revolutionize the way business is conducted for entre-

    preneurs and nonprofits across the country. It is a new age as we witness the

    maturing of cause marketing into an era of relationship building and partner-

    ships to benefit the economic and social community.

    What you can expect

    In future editions you will gain insight and strategies on the various aspects

    of being a Philantrepreneur. Our contributing authors, Marilyn Donnellen, Dr.

    Letter from the Editor

  • Tamm Shinshuri, and Ralph Stalter, Jr., are from across the country, leaders

    in their field and will add their own perspectives and viewpoints emanating

    from different vantage points. We will offer entrepreneurs and nonprofits,

    valuable information to build strong foundations for enduring success. We

    will also on occasion feature articles from guest authors, such as accountants

    and lawyers to provide a wide range of topics on business practices and

    implementation strategies.

    Join us

    The Philantrepreneur Journal is just one benefit of membership in The Philan-

    trepreneur community. The Philantrepreneur website, designed to attract

    other like-minded individuals, businesses and nonprofits encourages shar-

    ing, building relationships and creating partnership ventures which is the

    foundation of being a Philantrepreneur.

    ThePhilantrepreneur.com will be a

    resource hub for training, products

    and services to take your organization to the next level.

    We would love your input as we travel through this journey. To submit let-

    ters to the editor or articles for consideration, please

    email: [email protected].

    Dr. Victoria Boyd President, the GALAXY group, llc

    Executive Editor, The Philantrepreneur Journal

  • r. Victoria Boyd has been a driving force in education, non-

    profit and entrepreneurial endeavors as educator, trainer,

    administrator and advocate throughout the country. Through

    her companies she provides guidance and training in organizational

    management, individual coaching and business development.

    As President and Founder of the GALAXY group, llc., Dr. Boyd began her

    career as a dance teacher which eventually transitioned into roles such as writer

    for district and state curriculum, city-wide dance coordinator, professional

    development trainer, and coordinator of numerous city and state events.

    Recognized as a leader, she was offered and accepted the position of Arts/

    Education Consultant for Wayne County Regional Educational Service Agency

    (Wayne RESA), serving 36 school districts and numerous charter schools.

    In this position she developed professional training, teacher certification

    standards and other statewide educational initiatives. Concurrently, she was

    highly involved in the nonprofit sector, serving in capacities such as founder,

    board member, president and interim executive director. After retiring from

    education, equipped with this wide array of skills, her entrepreneurial spirit

    emerged, she launched the Galaxy group.llc and now serves entrepreneurs

    and nonprofits as a coach and mentor.

    Guided by her own passion of helping individuals and organizations grow,

    Dr. Boyd authored, The Wealthy Teacher: Answering the Question, Whats

    next? Influenced by the evolving environment and her personal journey,

    Dr. Boyd recognized the importance of keeping passion and values as the

    compass to guide your own journey. The books content supports anyone

    looking to answer the question Whats next? Delivered via mastermind

    programs, seminars and personal coaching, participants evolve through an

    interactive process of self assessment to embracing an enterprising spirit to

    launch an entrepreneurial endeavor with social enterprise at its core.

    Dr. Boyds emphasis on nonprofits and entrepreneurs was the inspiration

    behind coining the term Philantrepreneur. Now a brand recognized for

    empowering non-profits and business to build partnerships for win-win

    impact. The brand consists of a digital publication, The Philantrepreneur

    Journal, an internet radio show and an interactive website which serves as

    the hub for information and resources.

    Dr. Boyds long career in education

    and the non-profit sector has provided

    her with a scope of experiences that

    has made her a valuable resource. A

    dynamic trainer and coach her goal is

    to help others recognize that passion

    combined with purpose can be the

    compass that creates new rewarding

    paths and opportunities.

    About the Editor

  • Marilyn L. Donnellan

    more than 30 years ago,

    left a journalism career

    to serve as the executive

    director of a single-staff

    United Way. During her

    tenure with United Way,

    she spearheaded resource

    development and com-

    munity capacity building

    strategies in primarily small

    to mid-sized communities in progressively larger

    organizations in Washington, Oregon, California

    and West Virginia. She also served as the president

    and CEO of the United Ways of Texas, a member-

    ship association specializing in training and public

    policy advocacy for the nonprofit sector.

    In January of 2000 she started her own non-

    profit consulting firm, Nonprofit Management Ser-

    vices, LLC (NMS). The firm works with others con-

    sultants, authorized dealers and associations in the

    United States and Canada who use and sell NMS

    materials.

    Donnellan has written three books and training

    modules in use internationally: Core Elements of a

    Successful Nonprofit, The Hour Series of Guides

    for Nonprofit Management, and The Complete

    Guide to Church Management. She is currently

    working on three books for the publisher, Charity

    Channel, for a series, Nonprofit Management Sim-

    plified, which will be published in 2014. One of

    her books is translated into the native language of

    the Republic of Malawi, Africa.

    Marilyn has a masters degree in administration

    and a B.A. in Human Resources Management.

    For more information: www.nonprofitman-

    agementservices.com, or you can contact her

    at [email protected].

    ColumnistsSay welcome to our contributing columnist for The Philantrepreneur Journal. They will provide articles each edition on different

    aspects of their involvement as a Philantrepreneur, concepts and approaches for either an

    entrepreneur or nonprofit and support on how to evolve into a sustainable organization.

    Meet the Team!

  • Dr. Tamm Shinshuri is the living embodiment

    of the principles she brings to the world, which

    is to live as an expression of unconditional love

    and to be in direct deliberate action about her

    life purpose and desires.

    Her goal is to create with real intention each

    day through her devotion to live and be in phil-

    anthropic service for the expansion and evolu-

    tion of humanity through educational empower-

    ment.

    Dr. Shinshuri is a business philanthropist de-

    voted to human evolution. Her vision and mission is to ensure that more peo-

    ple, through authentic living and vocational and leadership development, are

    able to live empowered by eliminating the excuses that can get in the way of

    their human evolution and personal prosperity.

    Her first book Super Conscious Model for Living was published in 2011

    to support the Personal Transformation Leadership program at OT Academy.

    Her newest book Expressions of Unconditional Love and the music CD to ac-

    company the book is also featured subject matter text for the Personal Trans-

    formation Leadership program.

    Dr. Shinshuri plans to release her newest book Chosen to Lead: My Jour-

    ney of Personal Mastery and How to Reactivate Your Divine Connection in

    2014. Dr. Shinshuri lives in Sacramento, California where she continues to live

    out her life purpose as a prolific writer, business philanthropist, producer, and

    speaker. Her website is www.shinshuri.com

    Ralph Stalter grew up as the oldest of 7

    children in Pittsburgh, PA, where he gradu-

    ated from Duquesne University with a BA in

    Speech & Communications. He went on to

    earn his MFA in Acting from the School of

    Theatre at Boston University, and to do post-

    graduate work in Arts Administration at Columbia University.

    He was fortunate enough to enjoy a 15-year theatrical career, though

    most of that time was spent in executive level positions with performing arts

    organizations and nonprofit theaters -- including the role of Managing Direc-

    tor with three distinct members of the League of Resident Theatres (LORT).

    Before relocating to Las Vegas in 2010, Ralph lived in New York City for 30

    years, pursuing his second career as an information systems training profes-

    sional in the healthcare, legal, banking, and insurance industries. He contin-

    ues to work in technology in Las Vegas, where he serves as a Physician Sup-

    port Coordinator with Sunrise Health Hospitals, where he enjoys cultivating

    the spirit of life-long learning and community service among his colleagues,

    clients and partners.

    Ralph is excited about returning to his theatrical roots as a consultant with

    Nevadas first and only member of the prestigious League of Resident The-

    atres (LORT), Nevada Repertory, the sister company of Las Vegas Shakespeare

    Company. He has recently been appointed Chairman of the Advisory Board

    of the Cultural Corridor Theatre Center, which will transform the former Reed

    Whipple Cultural Center into a permanent home to many nonprofit arts orga-

    nizations in Southern Nevada.

  • 888.639.9670 www. ipowerpay.com/#903092

  • By Dr. tamm shinshuri

    This article is the first in a series of articles to discuss business philanthropy. What is business philan-

    thropy? How can it be utilized for the new federal tax structure that has been established to allow entre-

    preneurs and philanthropist create more socially beneficial enterprises?

    The DilemmaTraditionally non-profit and for-profit entities have been separate and diametrically opposed busi-

    ness structures. This led to business professionals traversing two different paths to accomplish their

    vision, mission, and purpose. It also required them to choose between being an entrepreneur or a philan-

    thropist. Entrepreneurs have the option to use a profit tax structure (e.g. sole proprietor, C-Corp, S-Corp,

    or LLC) to achieve your business goals. Philanthropists have a single non-profit tax structure, commonly

    known as the 501(c)(3).

    Entrepreneurs where given the ability to make money. Philanthropist could not make money or only

    enough to maintain business operations. Under the current taxing structure regulated by the Internal

    Revenue Service (IRS), this placed huge limitations on business professionals and philanthropists who

    had a desired to give and serve for a greater cause or social good. The limitations of the 501(c)(3) made it

    impossible for non-profit organizations to generate the income to maintain day-to-day business opera-

    tions. It made it untenable for investors and other types of business professionals to work with non-profit

    business entities in a way that they could receive a return on their investment.

    Ultimately, non-profit entities suffered for lack of alternative ways beyond grants, sponsorships and

    donations to generate enough sustainable revenue to maintain business operations.

    Dr. Tamm Shinshuri, founder and president of Shinshuri Foundation is a business philanthropist, author, producer, and speaker. She works tirelessly to live empowered and helps others live empowered too.www.shinshuri.com

    An Overview to Business Philanthropy

  • l3C anD ameriCans for CommuniTy DevelopmenT

    In 2001, Americans for Community Development (ACD) a non-profit

    organization started working with the IRS to create a new taxing structure.

    This new tax structure is the low-profit limited liability (L3C) corporation.

    The L3C is a legal business entity in the United States that was created to

    bridge the gap between non-profit and for profit investing. An L3C is a for-

    profit, social enterprise venture that has a stated goal of performing a socially

    beneficial purpose while receiving a financial return.

    Today, entrepreneurs and philanthropist have an alternative taxing

    structure available to them that they can use to create great organizations

    with dual operations.

    legislaTionThe L3C corporate structure has gained momentum across the United

    States. Legislation has passed in several states and Indian reservations

    including: California, Connecticut, Illinois, Louisiana, Maine, Michigan, North

    Carolina, Rhode Island, Utah, Vermont, Wyoming, and federal jurisdiction of

    Crow Indian Nation of Montana and the Oglala Sioux Tribe.

    ACD and the IRS are working together to establish new legislation in more

    states across the union. Their efforts have been focused on proliferation of

    the L3C structure by getting more states on board to pass legislation for

    adoption and use.

    WhaT is Business philanThropy?While much work has been done to bring the L3C tax structure to life, very

    little effort in the area of implementation and leadership has been planned

    or developed. There are few options, if any, available to entrepreneurs and

    philanthropists for how to start using the L3C to start a new business or

    convert their existing business to this type of structure.

    Business Philanthropy is an integrative, income generating business

    operations model. It focuses on helping entrepreneurs and philanthropists

    identify, plan, develop, and implement revenue-generating solutions. It

    is a bridge that closes the gap that exists in securing investment funding

    and attaining long-term profitability in any socially beneficial enterprise or

    business venture.

    Dr. Tamm Shinshuri founder and president of Shinshuri Foundation

    created a model and leadership program called Business Philanthropy.

    It aligns with the new L3C tax structureand shows entrepreneurs and

    philanthropists how to become exemplary Business Philanthropists and how

    to use the Business Philanthropy approach to develop and launch a

    successful L3C business.

    are you reaDy To Be a Business philanThropisT or

    philanTrepreneur?

  • By marilyn l. Donnellen

    Someone sees a need in their community so they start a nonprofit. Thats the traditional approach.

    But there are problems with that approach. It is estimated that 50% of these start-up nonprofits will

    close their doors within their first five years. Why?

    1. Lack of research on who else is addressing the identified problem, leading to duplication of

    services;

    2. Lack of solid infrastructure, due to lack of a basic understanding of what it takes to run a

    nonprofit, often because the founder has no business management experience;

    3. Lack of a variety of funding methods, leading to lack of adequate funding. With an estimated

    1.8 million nonprofits in the USA, the competition for limited resources is fierce. And, if the

    nonprofit has more than 20% of their budget coming from any single source, and that source

    dries up, the nonprofit will be in trouble;

    4. Failure to have any type of business plan or strategic plan.

    Because of the problems inherent in the traditional nonprofit start-up strategies, the philantrepreneur

    approach to meeting community needs is often radically different, although it too can have problems.

    Micro-financing strategies, developed to provide small loans to individuals in poverty, were the pre-

    cursor to todays social enterprise ventures used by philantrepreneurs.

    More than 20 states have either passed legislation or are considering bills on new social enterprise

    structures, usually led by philantrepreneurs. Examples of these new strategies include:

    1. L3C Low-profit Limited Liability Corporation, which must significantly further charitable

    purposes, with production of income and appreciation of property as insignificant purposes;

    Marilyn L. Donnellan, MS, President of Nonprofit Management Services, LLC with 30 years experience as CEO and consultant; international author and trainer.nonprofitmanagementservices.com

    The Philantrepreneur Approach to Starting a Nonprofit

  • 2. B Corporation (or Benefit Corporation) Corporate purpose is to

    create positive material impact on society and the environment;

    3. For-Profit Activity of a Nonprofit Maintains non-profit status but

    pays taxes through Unrelated Business Income Tax structure (UBIT);

    4. Partnerships with for-profit corporations Although designated as

    501(c)3 nonprofits, these types of nonprofits often ignore traditional

    start-up and funding strategies and rely on the for-profit expertise of

    their founders and corporate partners.

    Two examples of philantrepreneurs who started nonprofits as social

    enterprise ventures are: Wayne Elsey, founder of Soles4Souls (www.

    soles4souls.org), and Shawn Seipler, founder of Clean the World (www.

    cleantheworld.org). Both men came from highly successful for-profit careers

    but used their entrepreneurial and business skills to start non-traditional

    nonprofits. They combined their business acumen with their passion to help,

    partnering almost exclusively with for-profit corporations.

    The philantrepreneur approach to starting nonprofits and meeting

    specific needs requires this kind of outside-the-box thinking and strategies.

    Such approaches should decrease the failures of start-up nonprofits because

    they often have more solid infrastructures, reduce competition for funding,

    have a business plan, and are founded because of unmet needs.

    But be cautious. These partnerships are opposites. Charities work to

    improve their communities, while corporations are primarily interested in

    profit. Even so, such partnerships can impact individuals behaviors in positive

    ways by improvements in health, environment, sanitation, and by decreasing

    poverty.

  • By ralph J. sTalTer, Jr.

    In January 1998, The Wallace Foundation commissioned the Urban Institute to conduct a five-year

    evaluation of the Community Partnerships for Cultural Participation (CPCP) initiative. The initiative was

    part of the Foundations long-term commitment to support a range of cultural organizations and private

    and public arts funders to enhance broad participation and make the arts and culture an active part of

    peoples everyday lives.

    The published policy brief, entitled Arts and Non-Arts Partnerships: Opportunities, Challenges and

    Strategies, assessed the initiative and reached the following conclusion:

    Partnerships between arts and non-arts organizations can confer benefits on both parties if the

    benefits are mutual and in accord with their respective missions and if the potential risks and

    costs are anticipated and addressed.

    Non-arts agencies can gain fresh, high quality programming that stimulates new thought, activity,

    and involvement among their constituencies. Arts and cultural organizations can broaden

    community awareness of their missions and services, thus increasing the public value of their

    activities and offerings.

    Beyond that, such arts/non-arts collaborations provide a further and more enduring dividend for

    the participating organizations and the communities they serve. As arts and non-arts groups

    accumulate skills and experience in effective partnerships, additional possibilities for productive

    collaborations present themselves, leading to more and better opportunities for people to

    participate in cultural life.

    Ralph J. Stalter, Jr. Chairman, Advisory Board of the Cultural Corridor Theatre Center; management consultant to Nevada Repertory, Nevadas only member of the prestigious League of Resident Theatres (LORT).RalphStalterConsulting.com

    The Dynamic Development of Las Vegas Cultural Corridor

  • Article series focusing on:

    Foundation of The Dynamic Development of Las Vegas Cultural Corridor

    1. Why is this work valuable to any community considering the develop-

    ment of such a partnership model today?

    a. In todays economic climate, there are economies of scope to be

    realized in producing a range of cultural programs together than to

    produce each one of them on its own.

    i. Such economies come from businesses sharing centralized func-

    tions, such as marketing, technology, payroll or financial services.

    ii. They also come from interrelationships elsewher in the business

    process, such as cross-selling one product alongside another,

    or leveraging the artistic outputs of several organizations in a

    collective programming event.

    b. As Dan Brown said in The Lost Symbol, Knowledge grows

    exponentially. The more we know, the greater our ability to learn, and

    the faster we expand our knowledge base. Such a wealth of shared

    knowledge across the partnership is beneficial in building civic

    engagement, public investments and making the arts and culture

    central in community and economic development.

    c. Jeanne Meister, a contributor to Forbes Magazine, said that, As we

    look to the future, we have to ask: Will the workplace be on-site at

    our employers property, or on-demand at a collaborative space? Or

    will work simply be a mindset independent of place or time of day?

    i. When planning a new state-of-the-art theatrical facility, we must

    consider that todays work environment is more flexible and

    communication more mobile. Collective administrative services

    may not require physical office space, thereby leaving the bulk

    of the property available for educational programming, creative

    endeavors, broader community access and extended audience

    experiences!

    2. The history of the Cultural Corridor as A vital and important part of

    the city of Las Vegas overall plan to become a world-class city and a

    welcoming destination for both locals and tourists alike (Mayor Carolyn

    Goodman).

    3. Ongoing activities of the Cultural Corridor Coalition cultural institutions,

    local arts and culture professionals, neighborhood business owners

    and residents interested in promoting this neighborhood.

    4. Plans for the Cultural

    Corridor Theatre Cen-

    ter (CCTC), a state-of-

    the-art theatrical home

    for many nonprofit arts

    organizations.

  • By Dr. ViCtoria BoyD

    his issue of The Philantrepreneur Journal contains insight, from

    slightly different perspectives, on the organizational models

    emerging in the industry. Stepping back a bit to assess what it all

    means, in my opinion, the concept of sponsorship is becoming defunct.

    Instead, cause marketing is maturing into what is referred to as meaningful

    marketing or impact investing. This shift is evident across the spectrum in large

    and small enterprises and gaining momentum. Businesses are intertwining

    social conscious messages into their branding and marketing strategies and

    unfortunately those that have not made a shift are being left behind and fight

    to be heard.

    The relationship dynamics between for-profit and nonprofits is evolving into

    a collaborative approach that benefits both. These are exciting times that

    encourage communication and joint development of projects which serve

    both sectors. This approach, repeatedly mentioned in this issue, is being

    recognized and legislative action is spreading across the nation. It is the next

    generation of doing business.

    So how and where do you start to follow this path? It depends on the stage

    of development, launching, existing or renewal. There is not a one size fits all

    strategy and each situation has unique circumstances that need to be evalu-

    ated for the desired goals and point of entry. That is the core of the Philantre-

    preneur approach, to embrace multiple starting points to maximize business

    growth and community impact. To define them simplistically they include:

    1. Startups Build a strong foundation

    a. Entrepreneurs: Use social enterprise as the model

    b. Nonprofits: Develop entrepreneurial systems

    2. Existing Adopt new strategies and language

    a. Entrepreneurs/business: Integrate meaningful marketing into strategies

    b. Nonprofits: Use marketing as the basis for developing partnerships

    gaining momenTumI love this image because it depicts the past, present

    and future. Weve Nonprofits and business have

    been on a long road with the double yellow lines

    indicating, do not cross. Yet, there is a bright future

    ahead. Historically, federal and state statutes have

    viewed charitable and for-profit entities as mutually exclusive organizations

    whose mission statements rarely, if ever, overlap. It was the double yellow

    line warning. This legal distinction is being replaced by a new class of

    entrepreneurs that believe companies can pursue profit while advancing

    social causes. In response to the need for a legal designation that straddles the

    line between for-profits and non-profits, the US government and numerous

    states are recognizing and allowing for the creations of such enterprises.

    Even though discussed previously in this issue, there still may remain some

    questions that require a few more details for clarification. To start, there are

    three (not 2) processes currently in the industry low-profit, limited liability

    companies (L3C), Benefit Corporations and B-Corp certification.

    The Next Path and Generation of Doing Business

  • loW-profiT limiTeD liaBiliTy CorporaTions - l3C

    Since 2008, L3C has been a recognized business entity that allows com-

    panies to achieve modest profits while operating under a business model

    that emphasized impact over profits. L3Cs were specifically designed to help

    social entrepreneurs raise capital from a much broader range of investors

    than are typically attracted to traditional nonprofits. To regulate, many states

    across the country implemented legislation to accommodate and encourage

    social enterprise. Started in Vermont in 2008 there are now 10 states that have

    L3C designations and approximately 942 recognized companies.

    Under Treas. Reg. 1.501(c)(3), L3C designated entities must:

    1. Significantly further the accomplishment of one or more charitable or

    educational purposes;

    2. Be formed for the purpose of furthering said charitable or educational

    purposes;

    3. Not strive for the attainment of revenues or property as their primary

    purpose;

    4. Not be organized to further any legislative or political purposes.

    BenefiT CorporaTion or B CorpAn alternative for companies wishing to operate under a standard of social

    accountability is the increasingly popular B Corp. B Corps are not statutory

    business forms and in fact, any business can receive B Corp certification. The

    name creates some confusion because it implies you have to be a corporation,

    however a sole proprietor, partnership, LLC, LLP, co-operative, or any other

    type of business can be a B Corp. B Corp certification was created by B Lab,

    a nonprofit organization that created an assessment tool to demonstrate an

    organizations commitment to multiple stakeholders including your workers,

    customers, suppliers, community, and the environment. They also must pay

    a fee to join the B Corp community.

    Concurrently, and adding to the confusion is the Benefit Corporation

    legislation which gained momentum as an initiative launched by B Lab. A

    distinct government constituency statute, Benefit Corporation legislation

    has passed in 20 states and has introduced legislation in an additional 14

    states. New corporations can form under one of these statutes and existing

    corporations can convert into them. Benefit Corporations are required to

    draft or amend their articles of incorporation to include the following five

    provisions: Purpose, Accountability, Transparency, Right of Action, and Change

    of Control/Purpose/Structure.

    Companies that operate under these standards are legally protected and

    obligated to pursue social benefits before profits. This obligation guarantees

    to investors that management will operate the business in a way that furthers

    their interest in social improvement.

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